The Cold War and the Treaty of 1948

The Finnish statesman Juho Kusti Paasikivi was a leading proponent of
the relationship between Finland and the Soviet Union that permitted
Finland's postwar development. For decades, Paasikivi had been the
leading noncommunist Finn advocating reconciliation with the Soviet
Union. Before World War I, he had been on Old Finn and a Compliant, who advocated accommodation with
Russification. In the negotiations over the Treaty of Dorpat in 1920, he
had argued for drawing Finland's border farther away from Leningrad. In
the fall of 1939, he had recommended giving in to some of the Soviet
demands, because he considered the ensuing war avoidable. He had also
opposed Finland's entry into the Continuation War. As a former prime
minister under the Finnish White government of 1918 and as a member of
the Conservative National Coalition Party (Kansallinen
Kokoomuspuolve--KOK), Paasikivi was politically an anticommunist. His
lifelong study of history, however, convinced him that Finland's
policies toward the Soviet Union needed to be governed by pragmatism. By
late 1944, Finland's previous policy of antagonism to the Soviet Union
had been shown to be counterproductive, because it had nearly led to
Finland's extinction as an independent state. Summoned out of private
life to serve--first as prime minister from October 1944 to March 1946
and then as president from March 1946 to March 1956--Paasikivi
established the policy of accommodation with the Soviet Union that, with
time, became almost universally accepted among the Finns. The change in
Finland's policy was so marked that some observers considered the
post-1944 years to be the era of the "Second Republic."

The immediate postwar years of 1944 to 1948 were filled with
uncertainty for Finland because it was in a weakened condition and the
because new policy of reconciliation was still being formed. The Allied
Control Commission, established by the 1944 armistice to oversee
Finland's internal affairs until the final peace treaty was concluded in
1947, was dominated by the Soviets. Under the leadership of a Soviet,
Marshal Andrei Zhdanov, the commission checked Finland's adherence to
the terms of the preliminary peace of September 1944. The first test of
Finland's new policy of reconciliation was thus to observe faithfully
the treaty with the Soviets, including the punctual payment of
reparations and the establishment of war crimes trials. Eight leading
Finnish politicians were tried for war crimes in proceedings lasting
from November 1945 to February 1946. Among the accused were ex-president
Risto Ryti (served 1940-44), who, along with six other prominent Finnish
politicians, was convicted of plotting aggressive war against the Soviet
Union and was sentenced to prison.

The war crimes trials and other stipulations of the armistice were
distasteful to the Finns, but their careful compliance led to the
reestablishment of national sovereignty. Compliance may have been
facilitated by Finland's having its national hero, Mannerheim, as
president to carry out these policies, until he resigned for health
reasons in March 1946 and was succeeded by Paasikivi. The signing of the
Treaty of Paris on February 10, 1947, led in September 1947 to the
removal of the Allied Control Commission.

In their strict fulfillment of the Soviet terms of peace, the Finns
faced other difficulties. The armistice agreement of September 1944 had
legalized the SKP, which had been outlawed in 1930. In October 1944, the
SKP led in the formation of the Finnish People's Democratic League
(Suomen Kansan Demokraattinen Liitto--SKDL). Commonly referred to as the
People's Democrats, the SKDL claimed to represent a broad spectrum of
progressive forces. From its inception, however, the SKDL has been
dominated by the SKP and has provided the electoral vehicle by which
members of the SKP have been sent to the Eduskunta.

In March 1945, in the first parliamentary elections held after the
war, the SKDL scored a major success by winning fifty- one seats and
becoming the largest single party in the Eduskunta (the ML had
forty-nine and the SDP had forty-eight). Several factors account for the
success of the communists. A strong sympathy for communism among a large
number of voters had persisted since the Finnish civil war. In addition,
many Social Democratic voters were alienated from the SDP because of its
ardent support of the recent war that had cost Finland so dearly. Many
Finns who suffered under the depressed economic conditions of postwar
Finland voted for the SKDL as a protest gesture. Finally, the SKDL
proved adept at electoral politics, de- emphasizing its communist ties
and emphasizing its devotion to democracy, to full employment, and to a
peaceful foreign policy.

The SKDL played a large role in Finnish politics during the immediate
postwar years. By November 1944, President Mannerheim recognized the
growing power of the communists when he appointed to the cabinet the
first communist, Yrjö Leino, ever to hold such a position. Following
the election of March 1945, Leino was appointed to the important post of
minister of interior, a position from which he controlled, among other
things, the state security police and a large mobile police detachment.
The power of the communists was at its greatest from 1946 to 1948, when
the SKDL held, or shared, as many as eight of twelve cabinet posts.
These included that of prime minister, which was held by Mauno Pekkala,
who also served as co-minister of defense.

Pressures on Finland reached a peak in early 1948. In February the
communists took Czechoslovakia by coup, an act that heightened
international tensions considerably. The Soviets then requested that
Finland sign a treaty nearly identical to those forced on some of their
satellite states in Eastern Europe. By March there were rumors of a
possible communist coup in Finland. Although it is not clear that a coup
was imminent, President Paasikivi took precautionary measures. The
Finnish armed forces were under his control, and he summoned them in
strength to Helsinki, where they would have proved more than a match for
the police units of the ministry of interior that were suspected of
involvement in the coup.

In negotiating the requested treaty, meanwhile, the Soviets showed a
willingness to accept a neutralized Finland. Paasikivi secured
significant changes in the treaty that gave Finland substantially more
independence with respect to the Soviet Union than was enjoyed by the
East European states under Soviet domination. Paasikivi had served
notice on the Soviets that they would not get their way through
pressure, but rather would have to use military force. This they were
reluctant to do in the tense international atmosphere of early 1948.

The Treaty of Friendship, Cooperation, and Mutual Assistance
(FCMA--see Appendix B), which was signed on April 6, 1948, has since
then provided the foundation for Soviet-Finnish relations. The key
provision of the treaty, in Article 1, calls for military cooperation
between Finland and the Soviet Union if Germany, or a country allied
with it, attempts to invade Finland or the Soviet Union by way of
Finnish territory. Article 2 of the treaty calls for military
consultations to precede actual cooperation. Finland's sovereignty is
safeguarded, however, because mutual assistance is not automatic but
must be negotiated. The treaty helped to stabilize Soviet-Finnish
relations by giving the Soviet Union guarantees that it would not face a
military threat from the direction of Finland. The Soviets have been
pleased with the treaty, and before expiration its original ten-year
term has been extended to twenty years on three occasions--1955, 1970,
and 1983.

When new elections were held in July 1948, the SKDL suffered a sharp
drop in support, falling from fifty-one to thirty-eight seats in the
Eduskunta. Communists were not included in the new government formed
under the Social Democrat Karl-August Fagerholm, and there was no
communist participation in Finland's government again until 1966.

The end of World War II had found Finland in a thoroughly weakened
state economically. In addition to its human and physical losses,
Finland had to deal with more than 400,000 refugees from the territories
seized by the Soviets. In an attempt to resolve the refugee problem
through a program of resettlement, the parliament adopted the Land Act
of 1945. Through the program thus established, the state bought up
farmland through compulsory purchases and redistributed it to refugees
and to ex-servicemen, creating in the process 142,000 new holdings.
Finland's large class of independent farmers was thereby expanded
considerably. Although many of the resulting holdings were too small to
be economically viable, they speeded the integration of the refugees
into the social and economic fabric of the country.

Reparations were another burden for Finland. From the failure of the
reparations demands imposed by the Treaty of Versailles, the Soviets had
drawn the lesson that, to be effective, reparations should take the form
of deliveries of goods in kind, rather than of financial payments. As a
result, the Finns were obligated to make deliveries of products, mainly
machine goods, cable products, merchant ships, paper, wood pulp, and
other wood products. About one-third of the goods included as
reparations came from Finland's traditionally strong forest industries,
and the remainder came from the shipbuilding and the metallurgical
industries, which were as yet only partially developed in Finland. The
reparations paid from 1944 to 1952 amounted to an annual average of more
than 2 percent of Finland's gross national product (GNP). The
reparations were delivered according to a strict schedule, with
penalties for late shipments. As the earnestness of the Finns in
complying with the Soviet demands became apparent, the Soviets relented
somewhat by extending the payment deadline from 1950 to 1952, but they
still prevented Finland from participating in the Marshall Plan
(European Recovery Program). The United States played an important role,
nonetheless, by mediating the extension of financial credits of more
than US$100 million from its Export- Import Bank to help Finland rebuild
its economy and meet its reparations obligations punctually.

The Finns turned adversity into advantage by using the industrial
capacities created to meet the reparations obligations as the basis for
thriving export trades in those products. As a result, Finland's
industrial base acquired greater balance than before, between, on the
one hand, Finland's traditional industries of lumber, wood pulp, and
paper products, and on the other hand, the relatively new industries of
shipbuilding and machine production. Finland's growing integration into
the world economy was demonstrated by its joining the General Agreement
on Tariffs and Trade (GATT) in 1949.